Despite global market volatility, Nigeria’s economy continues to attract significant foreign investor interest, the latest is an initiative being championed by the government of the United Kingdom, which is interested in working with the Nigerian Capital Market, through what it calls the Emerging Capital Market Task Force.
The UK’s interest comes despite the recent fall in oil prices, and further justifies the Federal Government’s stance that Nigeria’s financial market is still the investors’ toast.
“Nigeria is probably the most exciting opportunity for capital markets development in the world. We in London have seen clearly how an effective, transparent and well-governed capital market –for bonds as well as stocks –can transform a country’s fortunes for the better, reducing dependence on bank capital and making investment securities available to a much broader range of individuals and institutions.
“I am greatly looking forward to being part of this project,” said Roger Gifford, former Lord Mayor of London and co-chairman of the UK Government’s Nigeria Emerging Capital Markets Task Force, when the high profile delegates visited Aigboje Aig-Imoukhuede, president Nigerian Stock Exchange (NSE).
“Nigeria continues to attract significant foreign interest, even during periods of global market volatility. We welcome initiatives that will further develop investor confidence and complement our bold financial market transformation agenda,” Aig-Imoukhuede told the UK delegates.
He said: “I like UK enthusiasm for the opportunities in Nigeria. We always believe that Nigeria’s development will come from investors (foreign and local) who have long term views in their investment in Nigeria.
“The interesting thing is that UK interest in Nigeria’s economy is coming despite a fall in oil prices. This proves that Nigeria is more than oil prices.
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“I commend the UK government and all other stakeholders for this initiative. We have always said that our success depends on starting right. We recognised the need to dimension Nigeria’s financial system.
“For every nation, trade is necessary for growth and development. The greater the velocity of trade, the better the growth of an economy. The infrastructure that facilitates trade is key. In that same way, capital market, whether by product or same infrastructure, can have that same effect.
“We recognise that more knowledge is beneficial for growth. The most important is that the end goal is the development of the market. I guess it is in that regard that the UK feels it can benefit from Nigeria,” the NSE president said.
Mike Purves, UK acting deputy high commissioner/director trade & investment, said, “This is the start of the conversation that we want. We are delighted to have Aig-Imoukhuede on board to lead the Nigerian Stock Exchange. This is not a talking show but to get real deliverables and kick-off, evidenced in the agreement we signed with the Nigerian Stock Exchange (NSE).”
The UK delegates visit to the NSE president offered them opportunity to interact with other capital market stakeholders including Albert Okumagba, president Chartered Institute of Stockbrokers (CIS), Victor Ogiemwonyi, chairman Association of Issuing Houses of Nigeria (AIHN) and Emeka Madubuike,
chairman Association of Stockbroking Houses of Nigeria (ASHON).
Prior to their visit to the NSE president, the Nigerian Stock Exchange and London Stock Exchange Group (LSEG) had signed a capital markets agreement at the NSE building, with the objective to strengthen cooperation and promote mutual development between the two Exchanges.
The Memorandum of Understanding (MoU) supports African companies seeking dual listings in London and Lagos.
At the agreement signing, Oscar Onyema, CEO, Nigerian Stock Exchange said it is another major step towards the NSE goal of ensuring that all companies that have substantial operations in Africa are accessible to both Nigerian and international investors.
“In addition, we will be ensuring that our leading companies achieve the global profile and international institutional investment they deserve.”
There are nine Nigerian or Nigeria-focused companies quoted on the London Stock Exchange, including six oil and gas explorers and three major Nigerian banks.
They have a collective market capitalisation of $14.2 billion. There are115 Sub-Saharan Africa-focused companies quoted on the London Stock Exchange markets, comprising: 26 companies on the Main Market, three GDR listings on the Main Market, two GDR listings on the Professional Securities Market (PSM), and 84 companies quoted on AIM, the growth market.
Nikhil Rathi, head of International Development, London Stock Exchange Group (LSEG) said, “The agreement signed is a reflection of the global investment community’s strong desire to be a part of the Nigeria story. As the world’s most international exchange, LSEG looks forward to partnering with the NSE in showcasing the opportunities the rapidly growing Nigerian economy offers investors.”
Responding to the UK delegates visit, Okumagba said, “We are quite happy with this initiative. From the standpoint of professionals in the market, we have a relationship with the UK professional bodies in the market. We want to deepen that relationship.”
Ogiemwonyi in his response said, “We need technical support from UK brokerage firms, particularly at times like this, when we are consolidating our brokerage industry.”
Madubike said, “We look forward to dealing with stockbrokers in your market and cooperating with them. Our capital market since after 2008 has witnessed so many initiatives. The reason being that we don’t want to go back to that level any more.”
Participants at the meeting were unanimous in their submission that an effective, transparent and well-governed capital market – across all asset classes – has the capacity to catalyse a nation’s quest for growth and development.
Iheanyi Nwachukwu
